Interest rates for U.S. Treasury debt display surprising behavior

Fearful Symmetry: Six Decades of Treasury Yields

By Alex J. Pollock

Interest rates in the market for U.S. Treasury debt display surprising behavior—behavior that previous market participants considered simply impossible.


Interest rates are the price put on the future. The market in U.S. Treasury debt securities is by far the largest market in the world, and the largest in history, for securities of homogeneous credit risk. It is very actively traded, liquid, and highly efficient.   Yet interest rates in this market over time display surprising behavior—indeed, behavior that previous market participants considered simply impossible. This history is an object lesson in how at each phase of the present, we know little of the future.


http://www.american.com/archive/2012/april/fearful-symmetry-six-decades-of-treasury-yields